Egypt’s current account deficit narrows after trade, tourism boost

Egypt's current account deficit narrowed following an increase in tourism revenues and a decrease in trade deficit. (File photo: Reuters)

Egypt's current account deficit narrowed in July-March, supported by stronger tourism revenues and a shrinking trade deficit, data showed on Wednesday.

The current account deficit shrank in the nine months to end-March to $3.9 billion compared to $7.1bn in the nine months to March 2012, the central bank said in a statement.

Offering slight respite to an economy hurt by dwindling foreign currency reserves, the first three quarters of the fiscal year saw tourism revenue rise to $8.08bn, up 14 percent on a year earlier.

Unrest following the revolution of early 2011 discouraged visitors.

Foreign Direct Investment (FDI) inched up to $1.4bn from $1.2bn in the first nine months of the last fiscal year.

This was mainly a result of a contraction in net investment outflows in the oil sector, which stood at $607.5 million, down from $2.1bn.

Workers’ remittances rose, bringing $13.9bn into Egypt, up from $12.9bn.

The trade deficit narrowed 2.7 percent to $23.8bn with merchandise exports rising to $19.8bn while merchandise imports were steady at $43.6bn.

The Egyptian pound fell below 7 to the dollar on the official market on Wednesday (today) for the first time, after a regular foreign exchange auction.

It was at 7.0001/7.0002 pounds per dollar after the central bank had auctioned $38.9m at a cut-off price of 6.9902 pounds.

On the black market, which has developed this year in response to exchange control measures, the pound was unchanged on Wednesday at 7.55/7.60 per dollar.

The currency has been under pressure as Egypt’s economy struggles with disruption following the revolution of 2011 and has lost more than 11 percent of its value since late December.

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Last Update: Wednesday, 20 May 2020 KSA 09:41 - GMT 06:41
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